Cruelbreed
03-18-2009, 05:31 PM
Hrm, what do you guys think of this? I know china is looking to acquire companies over seas.
Beijing blocks Coke's bid for Chinese company
By David Barboza
Wednesday, March 18, 2009
SHANGHAI: China said Wednesday that it had rejected a bid by Coca-Cola to buy one of the biggest beverage makers in the country for about $2.4 billion.
The decision blocks what would have been the biggest foreign takeover of a Chinese company and suggests that Beijing is still uncomfortable with foreign ownership of big Chinese companies.
The Chinese Ministry of Commerce said Coke's bid to acquire Beijing Huiyuan Fruit Juice Beverage Group was rejected on antitrust grounds. The government said the deal would have allowed Coke to dominate a huge segment of the beverage market here.
The ministry said Wednesday that it was worried that Coke would "set up some exclusive terms to restrict competition in the juice market," drive up consumer prices and squeeze out smaller beverage makers.
Shares of Huiyuan were halted Wednesday in Hong Kong before the announcement. The shares of other Chinese beverage makers, which could also have been takeover targets, tumbled early Wednesday on speculation that the deal would be rejected by regulators.
Shares of Huiyuan Juice have fallen about 30 percent since Coke first announced its bid in September.
The president and chief executive of Coca-Cola, Muhtar Kent, said in a statement that he was disappointed but respected the Chinese government's decision. He said the company's commitment to China remained strong.
"We will now focus all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment," he said.
Officials at Huiyuan Juice, based in Beijing, could not be reached for comment.
The deal was considered not only an early test of a new anti-monopoly law in China, but also of whether Beijing would allow foreign companies more latitude to buy big Chinese companies.
Very few foreign companies have taken full control of a major Chinese company. But many legal analysts said they expected the deal to be approved because China was moving aggressively this year to acquire foreign assets.
Steve Dickinson, an attorney at Harris & Moure who is based in China, said the country usually restricted foreign takeovers because of a long-standing belief that state assets should not be controlled by foreign entities.
"China's very open to greenfield investments, allowing foreign companies to start up businesses," Mr. Dickinson said. "But China strongly discourages outright purchases of existing Chinese companies to enter the China market."
Huiyuan Juice, which had revenues of about $380 million in 2007, is one of the biggest Chinese producers of apple, orange and pear juice.
The company is privately owned, and two foreign companies have minority stakes: Danone of France and Warburg Pincus of the United States.
The bid by Coke was part of the company's aggressive expansion effort in China, where it already has a large presence. The company sells more than a billion bottles of Coke annually in China, and also markets its Sprite and Minute Maid brands here.
In a statement, Muhtar Kent, the president and chief executive of Coca Cola said he was disappointed but respected the Chinese goverment's decision. He said the company's commitment to China remains strong. "We will now focus all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment," he said in the statement.
Bettina Wassener contributed reporting from Hong Kong.
http://www.iht.com/bin/printfriendly.php?id=20905949
Beijing blocks Coke's bid for Chinese company
By David Barboza
Wednesday, March 18, 2009
SHANGHAI: China said Wednesday that it had rejected a bid by Coca-Cola to buy one of the biggest beverage makers in the country for about $2.4 billion.
The decision blocks what would have been the biggest foreign takeover of a Chinese company and suggests that Beijing is still uncomfortable with foreign ownership of big Chinese companies.
The Chinese Ministry of Commerce said Coke's bid to acquire Beijing Huiyuan Fruit Juice Beverage Group was rejected on antitrust grounds. The government said the deal would have allowed Coke to dominate a huge segment of the beverage market here.
The ministry said Wednesday that it was worried that Coke would "set up some exclusive terms to restrict competition in the juice market," drive up consumer prices and squeeze out smaller beverage makers.
Shares of Huiyuan were halted Wednesday in Hong Kong before the announcement. The shares of other Chinese beverage makers, which could also have been takeover targets, tumbled early Wednesday on speculation that the deal would be rejected by regulators.
Shares of Huiyuan Juice have fallen about 30 percent since Coke first announced its bid in September.
The president and chief executive of Coca-Cola, Muhtar Kent, said in a statement that he was disappointed but respected the Chinese government's decision. He said the company's commitment to China remained strong.
"We will now focus all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment," he said.
Officials at Huiyuan Juice, based in Beijing, could not be reached for comment.
The deal was considered not only an early test of a new anti-monopoly law in China, but also of whether Beijing would allow foreign companies more latitude to buy big Chinese companies.
Very few foreign companies have taken full control of a major Chinese company. But many legal analysts said they expected the deal to be approved because China was moving aggressively this year to acquire foreign assets.
Steve Dickinson, an attorney at Harris & Moure who is based in China, said the country usually restricted foreign takeovers because of a long-standing belief that state assets should not be controlled by foreign entities.
"China's very open to greenfield investments, allowing foreign companies to start up businesses," Mr. Dickinson said. "But China strongly discourages outright purchases of existing Chinese companies to enter the China market."
Huiyuan Juice, which had revenues of about $380 million in 2007, is one of the biggest Chinese producers of apple, orange and pear juice.
The company is privately owned, and two foreign companies have minority stakes: Danone of France and Warburg Pincus of the United States.
The bid by Coke was part of the company's aggressive expansion effort in China, where it already has a large presence. The company sells more than a billion bottles of Coke annually in China, and also markets its Sprite and Minute Maid brands here.
In a statement, Muhtar Kent, the president and chief executive of Coca Cola said he was disappointed but respected the Chinese goverment's decision. He said the company's commitment to China remains strong. "We will now focus all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment," he said in the statement.
Bettina Wassener contributed reporting from Hong Kong.
http://www.iht.com/bin/printfriendly.php?id=20905949